When Crédit Suisse sells itself on credit...
When Crédit Suisse sells itself on credit...
I fail to understand how Credit Suisse could be taken over by UBS with the blessing of the Federal Council in such a short space of time and without any consultation of the shareholders, without even going through the process of nationalising the bank. Can the government really do as it pleases when a company's business is going badly?
T., Lausanne
Your questions are quite legitimate, since the takeover of Credit Suisse between the end of last week and the beginning of this week was only possible thanks to a number of legislative innovations, which were decided and formalised very quickly by means of a Federal Council ordinance. They went relatively unnoticed, except by specialists in banking law...
As you are well aware, under Swiss company law, the general meeting of shareholders is in principle the "supreme power" of the company, as stated in art. 698 of the Swiss Code of Obligations. When two companies intend to merge, the merger contract must normally be concluded in written form by their senior management or administrative bodies: for public limited companies, this contract must also be approved by the general meetings of shareholders.
In this case, Credit Suisse's situation differs from that of a "simple" public limited company, since it is a bank supervised by the Swiss Financial Market Supervisory Authority (FINMA) and is also one of the internationally active banks considered to be of systemic importance within the meaning of the Banking Act. It is therefore considered that their failure would seriously damage the Swiss economy and financial system. For this reason, such banks are said to be "too big to fail".
The Federal Council acted on the basis of Articles 184 and 185 of the Swiss Constitution concerning the safeguarding of the country's interests and its internal and external security, provisions which authorise it to adopt ordinances and take the "necessary decisions". Based on the country's fundamental norm - the Constitution being hierarchically above the laws - as well as on banking and merger legislation, our government urgently adopted an ordinance of 16 March 2023 on loans and guarantees that may be granted by the Confederation and the Swiss National Bank to systemically important banks.
